Missouri Winery Files Suit in Iowa

CAUTION: Your browser has Javascript disabled! To benefit from the complete functionality of this page please enable Javascript in your browser's preferences.

FILED JANUARY 1, 2010

Dear Client:

As we mentioned last week, Missouri-based OakGlenn Vineyards is suing the state for alleged post-Granholm Commerce Clause violations. Iowa allows in-state wineries to ship direct to consumers but bans non-reciprocal states from doing the same. The only reciprocal state besides Iowa is New Mexico, so all other states are unable to ship direct to Iowans.

The lawsuit was filed last week is a district court on behalf of OakGlenn Vineyards and two Iowa law students. The complaint alleges that Iowa laws “treat interstate sales and delivery of wine to Iowa consumers and retailers differently from intra-state sales and delivery of wine, discriminate against out-of-state wineries, require reciprocity under other states’ laws in order to obtain equal treatment under Iowa law, and provide economic advantages and protection to Iowa wineries and wine sellers, all in violation of the Commerce Clause of the United States Constitution.” The suit seeks a declaratory judgment.

In order to become compliant under Granholm, the state is considering legislation that would allow both in-state and out-of-state wineries to ship direct to consumers, but they must all pay a $1.75 per-gallon tax. Right now out-of-state wineries have to pay the $1.75 per-gallon tax when going through distributors, while in-state wineries avoid the tax by shipping direct. If passed, the proposal would add new taxes for in-state wineries. The Iowa Wine Growers Association is none too pleased, as you would imagine. Stay tuned as this story develops...

IOWA CONSIDERS BANNING EVERCLEAR. In other news, the Iowa Alcoholic Beverages Commission will hear public comments tomorrow in consideration of banning or limiting Everclear and other high alcohol content drinks. The five-member panel is considering regulations that include consumer education, limits on bottle sizes and an outright ban. The review was prompted by a college student who was rushed to the hospital with a BAC of nearly 0.50 after he was forced to consume large amounts of Everclear during fraternity hazing.

WSD BRIEFS:

VIRGINIA SENATE BILL 443, proposed by Sen. Mark Obenshain last Friday, would privatize state spirits sales by forcing ABC stores to close and auction off their licenses to private retailers. There are currently 334 stores in the state. Liquor stores would have to be a certain distance from churches and schools, and there could not be more than one license for every 10,000 residents in an area.

SAM’S CLUB WILL CUT 11,000 WORKERS, or 10% of its employees, chief Brian Cornell said in a letter to employees yesterday. The bulk 10,000 lay-offs will come from part-time, product demo jobs. Instead, Sam’s will outsource its in-club product sampling and demonstration to a third-party marketing company, Shopper Events. Sam’s also plans to eliminate more than 1,000 jobs by cutting its New Business Membership Representative positions by 2 per club. Recall that Sam’s already announced earlier this month it would cut about 1,500 jobs with its plan to shut 10 underperforming locations. The company as a whole employs more than 2 million people.

WJ DEUTSCH TO IMPORT LUKSUSOWA VODKA. W.J. Deutsch & Sons has signed an agreement with Wyborowa SA to become the exclusive U.S. importer for Luksusowa Vodka. Recall that W.J. Deutsch launched its new spirits division in July.

ADMIRAL IMPORTS was appointed the exclusive US importer for Jacopo Biondi Santi, the great-grandson of Brunello’s father Ferruccio Biondi Santi, effective March 1, 2010. Jacopo’s wines include flagships “Sassoaloro” and “Schidione.” The current importer is Remy Cointreau USA.

GLAZER’S DISTRIBUTORS has promoted Miron Sargent to president of Texas and Oklahoma. Miron is currently vp, spirits for Texas and has been with the company since 1986. Miron will report to Shawn Thurman, recently appointed as evp sales and marketing.

TERLATO WINES INTERNATIONAL has appointed Nancy Reynolds as west coast national accounts manager. Prior to joining Terlato Wines, Nancy worked for Young's Market Co.

Until tomorrow, Megan

“Aging is not 'lost youth' but a new stage of opportunity and strength.”Betty Friedan

--------- Sell Day Calendar ----------Today's Sell Day: 16Sell days this month: 20Sell days this month last year: 21This month ends on a: Fri.This month last year ended on a: Fri.YTD sell days Over/Under: 0